The value of the Australian dollar surged ahead after the release of the figures.

At 11:50am (AEST) the local currency was worth 90.91 US cents.

State final demand in June quarter

Northern Territory: up 6.5 per cent.

Western Australia: up 1.3 per cent.

Queensland: up 0.6 per cent.

South Australia: up 0.5 per cent.

New South Wales: up 0.5 per cent.

Victoria: flat.

Tasmania: down 0.3 per cent.

Australian Capital Territory: down 0.9 per cent

Source: Australian Bureau of Statistics. State final demand measures economic activity in states and territories, excluding imports and exports.

Annual growth, state-by-state

Northern Territory: up 4.8 per cent.

Queensland: up4.3 per cent.

Western Australia: up 3.3 per cent.

New South Wales: up 2 per cent.

Victoria: up 0.7 per cent.

South Australia: down 0.5 per cent.

Australian Capital Territory: down 1.1 per cent.

Tasmania: down 1.8 per cent.

Source: Commec. Figures combine ABS state final demand with net exports from each state and territory.

The Prime Minister Kevin Rudd says the results highlight the strength of the Australian economy in challenging global circumstances.

"We've grown 15 per cent over the last five to six years," he said.

"I draw to your attention to the fact the British economy has shrunk by 3 pre cent over the last six years. Therefore the economic credentials of this nation, run by this government over this period of time, are strong."

Among the states and territories, the Northern Territory posted the biggest increase in state final demand, rising by 6.5 per cent in the quarter.

State final demand measures economic activity, excluding imports and exports.

Western Australia's state final demand increased by 1.3 per cent, while in Tasmania and the Australian Capital Territory it fell.

The GDP release comes as a private survey shows activity in Australia's services industry is at its lowest level since the global financial crisis, despite a rise in new orders.

The Australian Industry Group's Performance of Services Index slipped by 0.4 of a point to a reading of 39 in August.

That is far below the 50-point level that marks growth in the sector.

AI Group says activity was weakest in the finance and insurance services sector, while the only sector to expand was health and community services.